Food cost percentage

Food cost percentage

Food cost percentage is the ingredient cost of an item divided by its selling price, expressed as a percentage. An item costing 4.50 in ingredients and selling for 15.00 runs at 30%.

It is only comparable if the contents match

The figure means nothing until everyone agrees what sits inside it. Packaging, boards and boxes are conventionally excluded and tracked separately, so a bakery counting its cake boxes in food cost always looks worse than one that does not. Decide what is in and keep it there.

It is also not the mirror image of gross margin unless ingredients are your only cost of sale. Add labour and packaging and the two numbers stop being complements of each other.

Theoretical against actual

Theoretical food cost comes off your recipes: what the items you sold should have consumed. Actual food cost comes off a stocktake: opening stock plus purchases minus closing stock, over sales.

The useful signal is the gap between them, not the level of either. Waste, spoilage, over-portioning and theft all live in that gap and appear in no recipe. A stable 32% that should be 28% is a finding. A 32% that moves to 38% in a month is an urgent one.

ibakepro costs recipes to the unit you buy in, which is the theoretical half of that comparison. See recipe costing.